Net loss of $1.0 million, a decrease in earnings of $2.8 million compared to net income of $1.8 million in the third quarter of 2017. This decrease was a result of higher realized and unrealized fair value losses on income producing properties, partially offset by reduced financing costs.

Revenue from all income producing properties for the third quarter was $12.5 million, a decrease of $0.1 million when compared to $12.6 million in the third quarter of 2017. This reduction in revenue is the result of a property sold during September 2018 and the loss of a Sears tenancy at Cornwall Square.

Same properties NOI for the third quarter was $7.5 million, a decrease of $0.1 million when compared to the third quarter of 2017, due to the loss of the Sears tenancy in Cornwall, partially offset by contributions from new leasing and completed development activities.

All properties NOI for the third quarter was $7.8 million, a $0.2 million decrease when compared to the third quarter of 2017, due to the sale of a property during September 2018 and the reduction discussed for same properties NOI above.

FFO and AFFO per unit of $0.08 and $0.06, were unchanged from the third quarter of 2017.

ACFO payout ratio of 96.4%, compared to 112.1% for the third quarter of 2017. Excluding the impact of $0.2 million in restructuring costs, the REIT’s third quarter proforma ACFO payout ratio would have been 89.6%.

Occupancy of 90.7% as at September 30, 2018, compared to a level of 95.3% as at December 31, 2017. The reduction to the REIT’s occupancy is primarily due to the departure of a Sears’ tenancy at a property in Ontario. Excluding Cornwall, the REIT’s occupancy was 96.6%.

As at September 30, 2018, the REIT had renewed a total of 137,905 square feet, or 75%, of leases that were originally set to expire during 2018.

Debt to gross book value was 57.7% as at September 30, 2018, a decrease from 59.4% at the end of 2017. This decrease is the result of the final repayment of convertible debentures and the repayment of various secured mortgages.

As at and for the three months ended

As at and for the nine months ended

Sep 30, 2018

Sep 30, 2017

Sep 30, 2018

Sep 30, 2017

Revenues from income producing properties

$

12,523,530

$

12,641,504

$

38,322,174

$

39,995,715

Net income (loss)

(977,976

)

1,768,671

(1,425,844

)

3,302,834

Net income (loss) per unit - basic

(0.02

)

0.04

(0.03

)

0.09

NOI - same properties(1)

7,459,434

7,522,098

22,040,966

22,140,396

NOI - all properties(1)

7,817,980

7,984,846

23,404,401

24,921,205

FFO(1)

3,834,823

3,275,535

10,564,279

9,686,197

FFO per unit(1)

0.08

0.08

0.23

0.26

AFFO(1)

2,909,027

2,477,573

7,775,518

7,241,432

AFFO per unit(1)

0.06

0.06

0.17

0.19

ACFO(1)

3,014,329

2,572,319

8,238,976

7,486,085

Distributions(2)

2,905,641

2,883,352

8,696,465

7,179,487

Distributions per unit(2)

0.06

0.06

0.19

0.19

ACFO distribution payout ratio(3)

96.4%

112.1%

105.6%

95.9%

Cash distributions(4)

2,687,828

2,416,452

7,981,378

5,697,076

Cash distributions per unit(4)

0.06

0.06

0.17

0.15

As at

Sep 30, 2018

Dec 31, 2017

Dec 31, 2016

Total assets

$

433,320,216

$

475,045,178

$

514,700,205

Total debt(5)

251,364,001

283,331,535

354,556,805

Total equity

173,808,402

183,347,418

151,508,380

Weighted average units outstanding - basic

45,945,455

39,435,646

33,690,649

Weighted average units outstanding - diluted

46,229,649

39,559,729

33,690,649

Debt-to-gross book value including debentures(5)

57.7%

59.4%

68.6%

Debt-to-gross book value excluding debentures(5)

57.7%

57.8%

57.5%

Interest coverage ratio(6)

2.35

2.02

1.75

Debt service coverage ratio(6)

1.35

1.25

1.14

Mortgages weighted average effective interest rate(7)

4.11%

4.10%

4.41%

Portfolio occupancy(8)

90.7%

95.3%

95.1%

(1) NOI – same properties and all properties, FFO, AFFO and ACFO are non-IFRS financial measures widely used in the real estate industry. See “Part II – Performance Measurement” in the accompanying management discussion and analysis (“MD&A”) for further details and advisories.

(2) Represents distributions to unitholders on an accrual basis. Distributions are payable as at the end of the period in which they are declared by the Board of Trustees and are paid on or around the 15th day of the following month. Distributions per unit exclude the 3% bonus units given to participants in the Distribution Reinvestment and Optional Unit Purchase Plan.

(3) ACFO distribution payout ratio is a non-IFRS financial measure that has a standardized meaning under RealPac. It is calculated as total distributions as a percentage of ACFO (a new measure standardized by RealPac – see Part II Performance Measurement in the MD&A). There is no directly comparable IFRS measure.

(4) Represents distributions on a cash basis, and as such, excludes the non-cash distributions of units issued under the Distribution Reinvestment and Optional Unit Purchase Plan.

(5) Debt-to-gross book value is a non-IFRS financial measure widely used in the real estate industry. See calculation under “Debt-to-Gross Book Value” in “Part IV – Results of Operations” in the MD&A. Management considers debt-to-gross book value to be a valuable metric in assessing the REIT’s overall leverage. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There is no directly comparable IFRS measure.

(6) Interest coverage ratio and debt service coverage ratio are non-IFRS financial measures widely used in the real estate industry, calculated on a rolling four-quarter basis. See definition under “Mortgages and Other Financing” in “Part IV – Results of Operations” in the MD&A. Management considers the interest coverage and debt service coverage ratios to be valuable metrics in assessing the REIT’s ability to make contractual payments on debt. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There are no directly comparable IFRS measures.

/EIN News/ -- (8) Portfolio occupancy is calculated as economic occupancy, not physical occupancy. A unit is considered occupied once it is committed to a lease with a minimum one-year term.

"The REIT has been very busy since Q2 2018. With regard to the disposition process, all but one asset has been sold in western Canada. Partners is pleased with the results of the western region marketing process. Cornwall Square has also been sold and the transaction is expected to be finalized early December," stated Jane Domenico, the REIT's CEO. “These dispositions allowed the board to declare a special distribution of approximately $40 million and make other significant corporate decisions as previously disclosed and outlined below.”

During 2018 the REIT has disposed of substantially all its properties in western Canada. In addition to generating substantial liquidity these dispositions will align its operations to serve a more geographically concentrated portfolio. The sale of the western properties, generated approximately $50 million in net cash proceeds of which $40 million will be returned to unitholders through a special distribution payment of $0.87 per unit. The REIT is pursuing certain initiatives that it expects will result in all the 2018 distributions being a return of capital. However, until those initiatives are completed there can be no assurances that all such initiatives will be successful.

As a consequence of these dispositions and the special distribution to unitholders, the REIT expects to reduce its regular monthly distribution from the annualized rate of $0.25 per unit to $0.18 per unit. It is also terminating the Dividend Re-Investment and Optional Unit Purchase Plan effective the November 2018 distribution.

In September 2018, the REIT retained BMO Capital Markets Real Estate Inc. to canvass the market for a possible sale of some or all of the REIT’s 11 retail properties in Quebec. No decision has yet been made as to whether or not to proceed with a sale of any properties in Quebec, which will depend upon the interest expressed by third parties. The REIT announced that it will call and hold on December 10, 2018, a special meeting of unitholders of record as of October 30, 2018, to vote on an amendment to the REIT’s Declaration of Trust (the constitution of the REIT) to provide the Board with the authority, should the Board determine to do so, to sell all or substantially all of the assets of the REIT, distribute the net proceeds to the unitholders, and wind-up, liquidate, dissolve or terminate the REIT, in each case without any requirement for further unitholder approval.

While no decision has been made by the Board to proceed with any such action, the approval of this amendment will facilitate the Board making timely decisions in regard to these matters including with regards to the REIT’s Quebec assets. The three largest unitholders of the REIT, who collectively beneficially own or exercise control or direction over an aggregate of 25,979,436 units (approximately 56.4% of the REIT’s outstanding units), have agreed to vote in favour of this amendment at the special meeting. The materials for this meeting were sent to unitholders on November 8, 2018.

Further Information

A more detailed analysis of the REIT's financial results for the first quarter are included in the REIT's Management Discussion and Analysis and Condensed Consolidated Financial Statements, which have been filed on SEDAR and can be viewed at www.sedar.com or on the REITs' website at www.partnersreit.com.

Conference Call

Partners will host a conference call at 9:30 AM Eastern on Friday, November 9, 2018, at which time Partners’ management will both review the financial results and discuss the REIT’s strategic outlook.

Conference Dial-In Details

Toll Free (North America): (800) 273-9672Local: (416) 340-2219

Instant Replay Details (Available until November 16, 2018)

Toll Free (North America): 800-408-3053Passcode: 6553641#

A recording of the conference call will also be available via Partners’ website.

About Partners REIT

Partners REIT is a real estate investment trust focused on the management of a portfolio of 24 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets across Manitoba, Ontario, and Quebec, and comprise a total of approximately 1.9 million square feet of leasable space.

Disclaimer

Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect," "will" and similar expressions to the extent they relate to Partners REIT. The forward- looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.